Gör Detaljhandel Valutahandlare Make Pengar

Trots att inte en komplett lista finns det tre viktigaste direkt från fladdermusen: De har vägen snabbare utbyggnad av infrastrukturen. I handel är hastighet en väsentlig fördel i motsats till investeringar. Varje nanosekund räknas. Tänk nu på hur många miljoner dollar dessa banker har spenderat i en vapenkonkurrens för att ge de mest avancerade, sofistikerade, effektiva installationsplattformarna och programmen för sina handlare. Och sedan tänka på att pitting dig själv mot dem. Lycka till. De har motsvarande backstage passersfront row seatsprivate publik med alla stora pengar konton (sina kunder) mest sannolikt att flytta marknader och i grund och botten får se vad de tror att de ska göra innan nästan alla. It039s gillar att få en förhandsgranskning av what039s att komma. När du vet hur många meter som kommer i vilken riktning i vilka valutor, är det inte särskilt svårt att räkna ut hur man tjänar pengar. För att förstå hur signifikant denna kant är, var det därför många näringsidkare, när de avyttrades från bankerna, plötsligt började posta ganska nedslående resultat, eftersom så mycket av deras quotalfaquot berodde på att bara få färg från kapitalmarknaderna killar och flöde Handlare nere. Utan att veta vilka stora block av pengar som skulle ske före det blev det mycket svårare att konsekvent göra riktningsvinster. De gör det mesta av sina pengar i riktningslösa affärer, antingen genom sina vanliga provisioner och spridningar, eller genom att aktivt ta ställning till volatiliteten. De kan tjäna pengar innan de ens tänker på vilken riktning något kan gå. Tyvärr kräver den senare typen av branscher nästan alltid adekvat användning och förståelse av alternativ och derivat, något som de flesta detaljhandlare kämpar för att förstå och genomföra. Det finns uppenbarligen andra, men dessa tre summerar en bra bit av kanten som de har över dig. 5.5k Visningar mitten View Upphöjda mitten Inte för reproduktion mitten Svar efterfrågad av Chris Potts Gonzalo Camina Ceballos. Masters Management amp Finance, ESCP Europe (2015) Handel med banker och den som är från detaljhandelsinvesterare är diametralt motsatt. Handlare i banker är inte mer än marknadsaktörer. Vad de gör är att citera budet och fråga där de är villiga att köpa och sälja ett visst valutapar. Å andra sidan tar detaljhandeln förexhandlare åsikter på paret. Normalt måste de betala spridningen för att kunna få några åtgärder (de kan också sitta på budet eller på erbjudandet) men om de vill se till att de får paret betalar de spridningen. Vad betyder detta Föreställ dig att ett valutapar för argumentets skull stannar på samma nivå eftersom varje gång någon köper den från marknadsföraren säljer någon det samtidigt. Tänk dig att citatet är 1.501.55. Det innebär att banken är villig att köpa på 1,50 och villig att sälja på 1,55. Om återförsäljare, kapitalförvaltare, hedgefonder och villkoren verkligen vill handla det paret kommer de alla att köpa på 1,55 (de som vill köpa) och sälja på 1,50 (de som vill bli korta) Banken är Gör en vinst på 5 cent varje gång att det finns motsatta affärer på marknaderna bara genom att citera denna spridning. Detta skulle vara ett perfekt fall för banken, men vad som verkligen händer på marknaderna Bankerna köper och säljer FOREX från varandra i det så kallade interbankmarknaden. Detta globala nätverk för utbyte mellan proffsen gör det möjligt för återförsäljare att anpassa sina lager och riskerade positioner (bland annat). Budgivningen spridits i marknaderna till kunder är något bredare än budgivningsspridningen i interbanken. Så föreställ dig om i interbanken citatet är 1.521.53. Banken efter att någon köper ett par från honom på 1,50 på marknaden kan gå vidare och sälja det paret på 1,52. Att göra detta blir näringsidkaren ute av risk och ger redan vinst (nästan arbitrage). Såsom du kan se behöver ingen röra sig för att bankerna ska tjäna pengar på grund av handel med Forex. (Det är förenklat men inte fel)) För en detaljhandelsinvesterare att tjäna pengar behöver de faktiskt paret att flytta till där de förutspådde att det kommer att flytta, och faktiskt på kort sikt är FOREX-marknaderna bättre representerade av en slumpmässig Promenad, vilket innebär att de är nästan omöjliga att förutsäga. (Den verkliga handeln som kan genomföras i Forex och det inträffar på grund av det faktum att den odefinerade ränteparitetsförslaget inte håller hela tiden, är den välkända kvittotransaktionen. 2,7k Visningar mitten Visa Upphöjda mitten Inte för Reproduktion mitten Svar efterfrågad av Chris Potts Ive har handlat valutor och räntor professionellt under ett och ett halvt årtionden. För överensstämmelse behöver jag vara anonym. 1) Kundflödet ger stabil inkomster till bankmarknadsförare, eftersom varje gång en kund handlar måste de Korsa handlarens budofferspridning, och det ger näringsidkaren möjlighet att säkra det på mitten av marknaden eller bättre. Men kundflödet tjänar inte alltid pengar, ofta kan handlare tappa pengar på flöde när marknaden rör sig mot dem. På lång sikt bör en bra FX-marknadstillverkare vid en bank kunna göra en del av årets intäkter på flöde. 2) Infrastruktur, forskning och information - Bankhandlare har Bloomberg-terminaler, Reuters-skärmar och forskning från egen bank och andra institutioner. De får marknadsfärg från säljare och andra handlare och får dygnet runt täckningen på vad som händer på marknaden. De har tillgång till bankens orderbok som ger en uppfattning om var utbud och efterfrågan är och där stopp är sammanslagna. Det finns ständigt utbyte av handelsidéer och synpunkter på ett handelsgolv, vilket exponerar handlare för potentiella möjligheter. Handlare har det bra problemet att översvämma med information så det är mer en fråga om att sortera ut vad som är viktigt och what039s inte. 3) Finansiell kudde och flera liv - Bankhandlare får alla sina fasta och rörliga kostnader (data, terminaler, mäklarhus, plattformar) betalda och får lön. Även om de bryter mot sina negativa förlustbegränsningar får de vanligtvis en andra eller tredje chans att göra pengarna tillbaka. Näringsidkare får stoppas av sina mäklarer när deras eget kapital går under ett visst golv, och när det händer är de ute av spelet. Bankhandlare får flera liv och får betalt för handel medan detaljhandeln bara har ett liv och betalar för handel. 4) Utbildning och erfarenhet - Juniorhandlare får mentoreras av erfarna yrkesverksamma som har lång erfarenhet av att tjäna pengar. De spenderar minst 10 timmar om dagen nedsänkt på marknaden. Den genomsnittliga detaljhandlaren ägnar bara ett par timmar till handel om dagen, om ens. Erfarenhet är en stor fördel i handeln, och bankhandlare har satt i flera timmar mer än detaljhandeln. 5) Survival of the fittest - Den typiska juniorhandlaren har 1-2 år för att bevisa att han har kotletter för att tjäna pengar. Även en äldre näringsidkare kommer sannolikt att förlora sitt jobb om han har haft bra över två år. Vad de flesta inte vet är att även med alla fördelar som anges ovan kan många bankhandlare inte tjäna pengar konsekvent år efter år. Trading FX är verkligen så svårt, eftersom it039 är den största och mest effektiva marknaden i världen. Som ett resultat har bara de bästa handlarna lyckats förbli i branschen medan alla mediokra handlare har blivit uttorkad. Jag är trött på att höra om detaljhandeln sugs in i spelet och förlorar sina besparingar. En taxichaufför erkände en gång till mig att han har försökt att handla FX för en viss sidoinkomst, men det gick inte bra. Taxichaufförer, tillsammans med de flesta i världen, har ingen möjlighet att handla med FX. För de som är bestämda och engagerade i att bli framgångsrika detaljhandeln, är här mitt råd: - Det tar 1-2 år att räkna ut din handelsstil och känna till dina styrkor och svagheter. Under denna tid handlar du små positioner och lägger bara på pengar på ditt konto som du har råd att förlora. Ha en annan inkomstström, så att du inte är beroende av framgång i FX-handel för att leva. - Sök ut erfarna handlare som har haft konsekvent framgångsrik handel FX. Hitta en eller två mentorer, liksom andra handlare som du kan dela med dig av idéer och marknadsfärg med. - Hämta en Bloomberg-terminal eller Reuters Eikon-konto om du har råd med en. Prenumerera på marknadskommentarer eller använd webbplatser som Currency Trading News amp Forex Market - eFXnews (som aggregerar bankforskning) eller Twitter som dina informationskällor. - FX-mäklare erbjuder 50: 1 hävstångseffekt eller mer. Om du vill stanna i spelet och undvika att spränga ditt konto, behåll dina positioner under 10: 1 hävstångseffekt. Undvik positioner med hög asymmetrisk risk, till exempel i fasta valutor och korta alternativ. Viktigtast, lägg i tiden och det hårda arbetet. Många detaljhandlare ser FX-handel som ett snitt för att tjäna massor av pengar, men verkligheten är att framgångsrikt tar lika mycket arbete som heltidsjobb, kanske mer. Tillbringa minst 8 timmar om dagen, läsa forskning, studera diagram och följa marknaden. Var ovanpå varje datafrisättning och centralbankmöte. Nätverk med andra FX-handlare och lära av dem. Var student i ekonomisk historia och observera hur marknaderna reagerade på tidigare händelser. Även efter att ha gjort allt ovan kan inte alla vara en framgångsrik valutahandelare på lång sikt. Goda handlare har inte bara skarpa kvantitativa färdigheter och hög intellektuell förmåga, men har också en specifik uppsättning karaktärsdrag som gör det möjligt för dem att lyckas. Traders måste ha extrem disciplin, självmedvetenhet, ambition, känslomässig kontroll, hård arbetsetik, god riskappetit (men inte för mycket), en kontrarisk tankegång och intellektuell nyfikenhet. 10.9k Visningar mitten View Upphöjningar mitten Inte för reproduktion It039 är inte alls sant Ingen kan tjäna pengar, that039s fel Den korrekta meningen är så många människor kan tjäna pengar i Forex trading men vissa kan se detta Vad är Forex Trading Du har handlat I år utan framgång i flera år. Så, jag tror att du försökte nästan alla typer av handel som scalping, dag handel, lång sikt, säkring. DON039T VARA OM FEL DU BEHÖVER RÄDD ENDAST ETT Så fokusera på handel istället för att vinna. Demo handla din systemstrategi innan du börjar äkta handel men PRACTICE IN DEMO ACCOUNT som det är en riktig bokföring. I min mening misslyckas de flesta människor inte, de vet inte vilken typ av näringsidkare de är långsiktiga, kortsiktiga, skalare. Välj vilken typ av näringsidkare du är 50 av din strategi är redo. Timing, välj dig handelssession är det London session ELLER Us-session eller London-USA överlappning. SE DENNA DU KAN UNDER STAND. Forex Market Timings: London Market and Us Marknads Öppettid Välj ditt system noggrant på det sättet som du kan träna det punktligt utan några raster. Nu spendera lite tid i strategi och träna det, Om det misslyckas starta en annan, om inte en annan så länge du kan vinna. Vinna och förlora inte tänka på det. Om du lär dig det på rätt sätt kommer du vinna oavsett vad som händer. Kom ihåg att du behöver rätt bara en gång då kan du lyckas. 618 Visningar mitten Inte för reproduktion Skälen bygger på fyra nyckelområden. Kostnader Handelskostnader, inklusive mäklar-, glid-, spridnings-, data - och teknikomkostnader är mycket större i procent av handelsstorleken för detaljhandeln. Detta gör dessa kostnader svårare att övervinna för att lyckas. Däremot kostar institutionella handlare som handlar i storlek inte bara kostnader mindre i procent av sitt handelskapital, men deras kostnader är också mindre i absoluta tal. Till exempel kommer de att betala bredvid ingen mäklare eller spridning, just för att de handlar i storlek eller faktiskt gör marknaden själv. Hävstång En sak (andra än kostnader) som dödar detaljhandeln är hävstångseffekt, eller ska jag säga orimlig användning av hävstångseffekt. Med 300 och 400 till 1 hävstång att vara fritt tillgänglig för små staplade spelare, är det inte överraskande att ett mindre drag mot dem kan torka ut sina konton. I den institutionella världen använder de för det mesta med reella pengar utan hävstångseffekt. Så förlusterna är en mycket mindre andel av deras flottör än hyrda detaljhandeln. Edge I synnerhet valutamarknaderna är några av de mest effektiva marknaderna i världen. Det betyder att de har ett mycket lågt signal-brusförhållande för någon strategi som försöker upptäcka möjligheter. Det innebär också att de flesta av de kvarvarande system som detaljhandeln använder (om de ens kan hålla sig till dem) har nästan ingen chans att arbeta på lång sikt. Något som 93 volymer på valutamarknaden är från institutionella eller suveräna spelare, och de har de senaste och största kvantitativa algoritmerna som trawlar marknaden hela tiden för möjligheter. En detaljhandelsinvesterare med ett grundläggande system är bara en liten bit att bli upptagen av dessa leviathans. Utförandegrad Spelreglerna på valutamarknaden ligger långt ifrån nivå. There039 är inte ens en utbyte för att göra spelets regler. Institutionella investerare och marknadsaktörer har tillgång till de bästa och snabbaste dataströmmarna, plus deras förmåga att hitta felprissättning och agera på det sättet innan någon detaljhandel investerare, konkurrerar mot dem nästan meningslösa. I slutet av dagen är handelns detaljhandel på valutamarknaden det snabbaste sättet för det fattiga huset. Don039t låt någon smart försäljare berätta något annat. Det finns fortfarande många andra mer ineffektiva marknader med kant som fortfarande finns i dem att handla, varför skulle någon välja valutamarknaden för att börja sin handelsresa Det enda svaret är: övertygande marknadsföring. Caveat Emptor 3.1k Visningar middot Visa Uppstodsmedel Inte för Reproduction middot Svar begärt av 1 person Jit Sarin. Arbetar Heltid som Forex Trader i 7 år. Forex Trading är min passion. Alla valutahandlare, förlora pengar på affärer. Nittio procent av handlarna förlorar pengar, till stor del på grund av bristande planering, utbildning, disciplin och dåliga regler för penninghantering. Om du hatar att förlora eller är en super perfektionist, så har du förmodligen svårt att anpassa sig till handel eftersom alla handlare förlorar handeln någon gång eller någon annan. Forexmarknaden är en av de mest populära marknaderna för spekulation på grund av sin enorma storlek, likviditet och tendensen för valutor att röra sig i starka trender. Du skulle tro att handlare över hela världen skulle döda, men framgången har varit begränsad till mycket liten andel av handlare. Problemet är att många handlare kommer med det missvisade hoppet om att göra en miljon dollar, men i själva verket saknar de den disciplin som krävs för att verkligen lära sig konsten att handla. Korttidshandel är inte för amatörer, och det är sällan vägen att få Rik snabbt. Du kan inte göra gigantiska vinster utan att ta gigantiska risker. En handelsstrategi som innebär att man tar en stor grad av risk innebär att det leder till inkonsekvent handel och stora förluster. En näringsidkare som gör detta har förmodligen inte en handelsstrategi. Forex Trading är INTE ett Get-Rich-Quick-system. Forex trading är en färdighet som tar tid att lära sig. Kunniga handlare kan och tjäna pengar på detta område. Men som alla andra yrken eller karriär händer framgång inte bara över natten. Tänk på det, om det var, skulle alla handel redan vara miljonärer. Sanningen är att även experter med lång erfarenhet fortfarande möter periodiska förluster. Det tar mycket och mycket praktik och erfarenhet att behärska. Det finns inget ersättare för hårt arbete, avsiktlig övning och flitighet. Öva handel på en DEMO ACCOUNT tills du hittar en metod som du vet inifrån och ut, och kan bekvämt genomföra objektivt. I grund och botten hitta vägen som fungerar för dig. För att få mer fördjupad kunskap om olika handelsaspekter och mekanismer kan du associera med en bra mäklare. Jag har handlat med Exness under de senaste 7 åren. Du kan kolla in deras hemsida: exnessregister. 820 Visningar middot View Uppvotes middot Inte för reproduktion Mycket bra svar här. Jag vill påpeka en som jag tror är väldigt viktig och har inte blivit uppmärksam än Bankbankers har en särskild riskchef. De gör att du hedrar dina riskbegränsningar och går in när en näringsidkare börjar på lutning. Revenge trading är en av de största anledningarna till att detaljhandlare kontinuerligt blåser ut sina konton. När du har en objektiv tredje part som tittar över din axel följer du reglerna, eller du har inget jobb. Det är därför många bankhandlare har problem när de går ut på egen hand. 541 Visningar Middot Inte för reproduktion Sean Mcq. Ex finansiell derivathandeln Det beror helt på hur länge tiden är. De flesta handlare har inte rätt att behålla över natten vid banker och måste därmed likvida positioner på sin bok. Därför handlar de om handel med större ståndpunkter som de ser på hela livslängden. Om du tittar på en marknadstillverkare eller proffsskiva, kommer de redan att ha marknadsutvecklingen identifierad och titta bara på att returer från kända stödområden tar position. Om stödområdena reamins har de ett lönsamt läge och stänger det ut vid dagars slut. Titta på hedgefonder eller CTA Trading Strategy Analysis och Selection som carpricorn, de kommer att använda mutliple strategier men baseras över längre perioder. 1k Visningar mitten Visa Upphöjda mitten Inte för reproduktion Hur mycket kan valutahandlare göra en dag Kan detaljhandlare komma in på valutaalternativsmarknaden Hur mycket kostar en näringsidkare på en dag Hur mycket pengar gör en Shell-handlare Vem är framgångsrika Forex-handlare Hur mycket pengar gör En framgångsrik daghandlare gör på en dag Skaffa alla handlare pengar till detaljhandeln Skulle alla handlare förlora pengar Hur mycket tjänar en näringsidkare Gör du mer pengar som börsmäklare eller dagdrivare Hur mycket pengar behöver du starta forex trading Vem kan Tjäna mer pengar: en näringsidkare eller en programmör Hur många detaljhandeln i Forex världen över Kan en detaljhandlare göra pengar ur FX bära handlar Som en genomsnittlig näringsidkare om jag tar motsatt handel med min första idé, ska jag göra en död eftersom 90 -95 av näringsidkare förlorar pengar Vad är det bästa sättet att tjäna pengar i forex Hur förändras valutan på valutahandeln När europeiska länder ändrats till euron, förlorade handelsmän eller tjänade pengar Hur mycket pengar kan en profe Ssional miljonär gör årligen från Forex tradingHow att tjäna pengar Forex Forex EUR 10.000 x 1.18 US 11.800 EUR 10.000 x 1.25 US 12.500 En växelkurs är helt enkelt förhållandet mellan en valuta värderad mot en annan valuta. Exempelvis anger USDCHF-växelkursen hur många amerikanska dollar som kan köpa en schweizisk franc, eller hur många schweiziska franc du behöver köpa en amerikansk dollar. Hur man läser en Forex Quote Valutor är alltid citerade i par, som GBPUSD eller USDJPY. Anledningen till att de citeras i par är att i varje valuta transaktion köper du samtidigt en valuta och säljer en annan. Här är ett exempel på en valutakurs för det brittiska pundet mot den amerikanska dollarn: Den första listade valutan till vänster om snedstrecket (82208221) kallas basvalutan (i det här exemplet, den brittiska punden), medan den andra En till höger kallas kontot eller citatvaluta (i det här exemplet, US-dollarn). När du köper anger växelkursen hur mycket du måste betala i enheter i citatvalutan för att köpa en enhet i basvalutan. I exemplet ovan måste du betala 1,51258 amerikanska dollar för att köpa 1 brittiskt pund. När du säljer, berättar växelkursen hur många enheter av citatvalutan du får för att sälja en enhet i basvalutan. I exemplet ovan får du 1,51258 amerikanska dollar när du säljer 1 brittiskt pund. Basvalutan är 8220basis8221 för köp eller sälja. Om du köper EURUSD innebär det helt enkelt att du köper basvalutan och samtidigt säljer citatvalutan. I caveman talk, 8220buy EUR, sälj USD.8221 Du skulle köpa paret om du tror att basvalutan kommer att uppskatta (värdera) i förhållande till citatvalutan. Du skulle sälja paret om du tror att basvalutan kommer att försämras (förlora värde) i förhållande till citatvalutan. LongShort Först bör du avgöra om du vill köpa eller sälja. Om du vill köpa (som faktiskt betyder att köpa basvalutan och sälja citatvalutan) vill du att basvalutan stiger i värde och då säljer du den till ett högre pris. I trader8217s pratar kallas detta 8220gående long8221 eller tar 8220long position.8221 Kom bara ihåg: lång köp. Om du vill sälja (som faktiskt betyder att sälja basvalutan och köpa offertvaluta) vill du att basvalutan ska falla i värde och då skulle du köpa tillbaka den till ett lägre pris. Detta kallas 8220going short8221 eller tar 8220short position8221. Kom bara ihåg: kortförsäljning. Jag googlade Newport Private Capital LLC och fann: Newport Private Capital, LLC Mitt antagande är att strategin har arkiverats eftersom den inte längre fungerar. Hur som helst kan du se från mina röda pilar att hans strategier har haft betydande drawdowns, i motsats till det tacksama förtroendet han utstrålade i annonsen för Jim Dalton039s 6,5 timmars handelsvideo. Jim Dalton tror jag på det mer respektabla slutet av människor som säljer indikatorer som handlar om nyhetsbrev, seminarier, coaching, pensionering tidigare och bättre osv. Här är ett lite snyggare exempel: (Jag betonade vad jag anser vara ett mycket misstänkt språk.) Om du har läst citlong - form marketingquot eller lyssnade på kvotens konstiga tipquot-videoannonser, kommer denna tonningstyp låta bekant.) Eftersom ansvarsfristerna på framsidan av vart och ett av dessa videoklipp säger att du kan förlora mycket pengar gör vad de säger att du ska göra. Du borde kanske undra varför de säger att de inte ger investeringsrådgivning innan de ger investeringsrådgivning. Slutligen: Folk verkar vara villiga att göra mycket arbete för att undvika arbete. Finns det något annat sätt att du kan spendera samma tid som skulle ge dig en monetär avkastning? 3.1k Visningar på mitten Visa Upphöjda mitten Inte för reproduktion Vill du räkna ut hur man börjar en Forex1-utbyte på nätet som nybörjare? Det JA, här är en topp till botten guide på den mest skickliga metoden för att vinst på nätet med valutahandel för fledglings. Trots det faktum att exceptionellt farligt särskilt för de mindre erfarna, kan utbyte av fjärrhandel på kontanterannonsering (även kallad Forex-utbyte) vara en spännande åtgärd och dessutom enastående brunnspring av spekulationstjänst. Monetära formulär värda 5 biljoner dollar byts ut i Forex-utställningen varje dag. Således kan du dra nytta av valutahandeln utan att bidra med alltför mycket. I händelse av att du har hoppats på att börja ett vinstdrivande företag som du kan fortsätta att springa från tröst i ditt hem, då borde du överväga valutahandel. En av de stora sidorna av verksamheten är att det inte finns några formella förutsättningar för att börja byta utex. Forex utbyte omfattar i princip utbyte av mynt. Du köper ett specifikt mynt när dess värde sjunker och du erbjuder det snabbt när kostnaden går upp. På detta sätt är din uppgift att göra så mycket nytta som man kan förvänta sig av förändringarna i kostnaderna för monetära former. Trots det faktum att riktlinjen genom vilken kontanter görs är densamma i valutahandel, börsutbyte och produkter som utbyter båda utbytesmetoderna kontrasterar i de åtföljande riktiga vinklarna: Börseri inkluderar inköp och erbjudande av aktier, medan valutahandel omfattar inköp och erbjudande kontanter. Penningmarknaden är dynamisk för bara vissa timmar på dagen, men valutautbyte sker hela dagen, varje dag. Insiders och marknadsproducenter kan styra aktiehandelssystemet, men valutakursen kan kontrolleras. Forex tillåter kantbyte, vilket gör att du kan köpa ett stort antal dollar som är värd för ett visst mynt när summan av vad du har är under 100. Detta är outlandish i börsutbyte Erbjuds av vissa företag husbanker). Med en minimal utgift, tolerans, en dator och en pålitlig webbförening kan du bli en Forex-mäklare. Enkelheten att börja verksamheten i alla fall borde du veta några saker och ta efter specifika steg, eftersom valutahandel är ett exceptionellt farligt företag. Här är de medel du borde ta efter för att hamna en forex-återförsäljare. Börja en Forex Trading Business Online och tjäna pengar till nybörjare 1. Få grundläggande grundläggande lärande Forex utbyte är en liten bit specialiserad och det är helt svårt att lära sig ensam men självutbildade video instruktionsövningar och kurser är för närvarande tillgängliga på webben. I alla fall föreskriver jag att du lär dig under lärlingsutbildningen om en uppsättning valutahandlare. Du borde också gå till workshops och läsa kurser för att underlätta för dina förmågor. Det är dessutom viktigt att du läser böcker om affärs och finansiella frågor, eftersom det kommer att öka din förståelse, särskilt när du byter utex med central utredning. Några viktiga valutafrågor du måste veta innehåller följande: Baspengar: Den typ av pengar som du spenderar eller tar bort. Som det är det här kontanter du byter för att köpa en annan typ av pengar. Citera pengar: De pengar som du erhåller med basmyntet. Konverteringsstandard: Det här låter dig veta hur mycket baspengar du behöver spendera för att köpa anbudsmynt (eller omvänd). Lång position: Du tar en lång position när du behöver köpa baskassan och erbjuda citatmynt. Kort position: Du tar en kort position när du behöver köpa citationstecknet och erbjuda baskassan. Erbjudet värde: Det här är den kostnad som din agent kommer att köpa baspengar i motsats till citatpengar. Erbjudandekostnaden är den bästa kostnaden där du är villig att erbjuda dina pengar tillgängliga. Fråga värde: Detta kallas dessutom erbjudandekostnaden. Det är den kostnad som din förmedlare kommer att erbjuda baspengar i motsats till citatpengar. Spridning: Detta är kontrasten mellan anbudspriset och frågekostnaden. I alla händelser bör du komma ihåg att det finns en hel del ett större antal formuleringar att lära sig än de få som klargjorts här. Längs dessa linjer borde du kontakta en Forex Exchange Master, läsa böcker eller läsa webben för mer information om de olika formuleringar som används som en del av Forex Exchange. Fall av exceptionellt föreskrivna böcker om valutautbyte införlivar quotExchange Vad du Seequot (av Larry Pesavento och Leslie Jouflas) och quotThe Secrets of Economic Indicatorsquot (av Bernard Baumohl). 2. Få utbyte av kapital Du behöver inte ha enorma pengar för att börja byta valuta. Detta är på grund av att du kan byta på kanten, vilket innebär att du kan ta inköpslösningar värda en hel del dollar med bara 50 eller ännu mindre. På det normala behöver en valutahandel cirka 300 för att öppna en rekord och börja utbyta. Det rekommenderas exceptionellt att du öppnar ditt utbyte konto med i alla fall 1000. Det här hjälper dig att byta ut med något av en kudde vid olyckor. Var det som möjligt, om du inte kan bära kostnaden för denna summa till ett början, kan du börja med i alla fall 300. 3. Välj en Forex-återförsäljare En Forex-återförsäljare är det online-steg genom vilket du kommer att komma till Valutan annonserar och gör din utbyte. Det är viktigt att du läser villkoren och tillstånden för någon agent innan du löser dem. Detta medför att några återförsäljare kommer att erbjuda vissa alternativ som kommer att vara användbara för några handlare medan de är svaga för olika mäklare. På så sätt borde du kontrastera många mellanhänder med respekt med deras villkor, utbyte av val och kundundersökningar och välj den som du tror är mest rimlig för dig. Du kan behöva leta efter vägledning från en valutahanterare innan du väljer din representant. 4. Öppna ett demokonto När du har valt en representant, är det dags att öppna ett demokonto. Detta är en virtuell rekord som erbjuds av förmedlaren för en viss tid för testning (t ex 30 dagar), vilket ger dig en vibe av agent039s utbytesstadiet och en möjlighet att byta på scenen med hjälp av spelkassa. Genom att använda ett demokonto kan du bli bekväm med mellannivåens utbyte och enheter. Det kommer också att sätta upp dig för att utbyta den äkta marknaden. På så sätt kan du inte byta ut äkta pengar utan att ha provat mellanledets utbytesstadium med en demo som representerar inte mindre än 90 dagar. 5. Repetera bra De flesta online-forex-företagsorganisationer gör att du kan göra en fri praxis eller demokonto. Detta är en reproduktion av den äkta forexannonsen som tillåter dig att förbereda dig med virtuella pengar innan du börjar utbyta med äkta pengar. Forex utbyte är inte den sort som du kommer att lära dig på språng. Du måste förbereda breddat för att veta när du ska göra rätt inköp och erbjuda val. Som ett förslag borde du gå igenom några veckor och förbereda dig med en gratis rekord tills du kan göra fördelar på ett tillförlitligt sätt och ha minskat dina priser för att förlora till det minsta. För att upptäcka gratis Forex demo konto kan du söka på webben. Eftersom demo-posten är mycket densamma som vad du kommer att ha på den äkta marknaden, borde du avsätta din möjlighet att göra vad som behövs. Försök att aktualisera de olika huvudutbytes tipsen och lura dig att du har funderat på hur man ser vilka funktioner som är bäst. What039s mer, försök att bygga upp din egen utbytesstil och tankar. Ess hur man läser diagram och olika tips, och ace vilket val att ta vid vilken tidpunkt. Det kan också vara användbart att leta efter extra riktning från online-tillgångar och dessutom valutahandel med specialister, eftersom detta kommer att hjälpa dig på de bra 039ol-dagarna när valutahandeln kan vara exceptionellt överväldigande. Skapa ett live Forex Exchange-konto med en pålitlig Forex-specialist när du har tillräckligt beredd och konstruerad säkerhet med ett demokonto. Ännu bättre, väsentligen ändra över din demo-post till en live-post genom att spara pengar enligt riktlinjerna för site039. De flesta specialister erbjuder mindre än förväntad och miniatyriserad skala konton, vilket innebär att du kan börja byta utex med så lite som 500. Denna summa kommer att utnyttjas till ökade fördelar. Notera de förfaranden som ger dig kolossala fördelar och dessutom de som inte fungerar för dig. Nyckeln till utvidgade fördelar är att fortsätta rehashing vad som fungerar (tills det inte längre fungerar) och att kassera vad som medför dåliga resultat. Att gå in i den äkta valutamarknaden är generellt en angelägen och energisk bakgrund. Sannolikt kan demoposten sätta upp dig för de specialiserade delarna av valutautbyte, men när äkta pengar ingår ingår dina känslor eventuellt den viktigaste faktorn. Du bör behålla självbehärskning och göra ditt bästa för att hålla dig med liknande tekniker som fungerade för dig medan du repeterade med demokontot. Om du ignorerar dina känslor kan det vara extremt besvärligt, men det är tänkbart. I händelse av att du förlorar pengar efter din första utbyte, överlåter du inte. Eller kanske försök att känna av vad som visade sig dåligt, lösa det och försök igen. Med hänsyn till allt, bör du förstå att valutahandel är en stadig lärande bakgrund. Utbyta slip-ups kan orsaka olyckor enorma ibland. Faktum är att även veteranexxhandlare tappar pengar på händelser. I vilket fall som helst kommer du att bli en effektiv valutahandlare bara i händelse av att du får av dina missteg och strävar efter att behålla ett strategiskt avstånd från dem senare. 547 Visningar Mellersta Visa Upphöjda mitten Inte för reproduktion Mesta kan du upptäcka att 80 av FX-handlare förlorar pengar. I verkligheten är statistiken ännu värre, I039d säger att 95 av valutahandlarena förlorar. Jag skulle också vilja påpeka att mestadels dessa killar enkla har ingen aning om vad de gör. Människor satte höga förväntningar (som 500 avkastning på 10 dagar) och börja handla galna volymer. Du kan knappt stöta på en näringsidkare som söker 1-3 månadsavkastning. Alla tycker att039 är för låga, även om det är ganska bra resultat. Den främsta anledningen till att handlare misslyckas är hävstången. Om du tar en titt på Admiral Markets trading konton. Du kommer se att handel 500 gånger mer än du har är tillgänglig. Vissa mäklare erbjuder 1000: 1, eller till och med 2500: 1. Och handlare använder det. Att vara lönsamt: ha realistiska förväntningar. Investera i lärande. Don039t försök få pengarna tillbaka från de förlorande affärer. 889 Visningar Middot Visa Uppvotes middot Inte för reproduktion Copert Smith. Bästa investeringswebbplatsen är usaforexsignal Som en startexportmäklare kan du utan mycket av en sträcka gå vilse, misstänka eller överbelastas för all den information du är angrepp på på webben om utbyte. Det bästa är att helt enkelt ta det måttligt, ta reda på hur man utbyter legitimt från en skicklig skicklig och inte ökar den. De medföljande 10 Forex Exchange Tips är saker som jag önskar att någon hade låtit mig veta när jag ursprungligen började utbyta. Along these lines, because of that, I am giving you ten of the most critical exchanging tips for a starting (or any) dealer to ingest before beginning in the market. 10. Take in the fundamentals first Numerous starting dealers take a stab at bouncing directly into the market with no genuine foundation information on the business sectors they are exchanging. To assemble a strong exchanging establishment, you have to set aside the opportunity to find out about how the Forex advertise functions (or any market you039re exchanging) and truly get a strong comprehension of all the language, and so forth before you really make a plunge and begin taking in an exchanging methodology. You can pick up this information by taking my free amateurs forex exchanging presentation course. 9. Learn one exchanging system, stay with it. One of the greatest oversights I see starting brokers make over and over, is changing exchanging strategies time and again. On the off chance that you are utilizing a legitimate, sound judgment exchanging strategy like my value activity technique, you have to truly learn it and ace it before you do whatever else. On the off chance that you hop from technique to strategy since you think you039ll locate some quotHeavenly Grailquot exchanging procedure, you are essentially working on false trust and being counter-intuitive, and you will lose cash. Likewise, don039t switch strategies since you had a couple losing exchanges. Any technique will have a specific measure of failures over a specimen size of exchanges, this is typical and some portion of exchanging. You can039t let losing exchanges influence you excessively you truly do require super cold teach to exceed expectations at exchanging. 8. Try not to get overpowered It039s anything but difficult to feel overpowered with data and exchanging methodologies as a starting broker, it happens to every one of us at the outset. The most ideal approach to farthest point this or dodge it through and through, is to discover a guide, somebody to gain from, and piggy back off their prosperity. I have laid out all my exchanging procedures for you to learn in my value activity exchanging course and as I would like to think, the best thing you can do is shut everything else out, overlook all that you039ve learned, and begin once again with my lessons from a fresh start and concentrate just on that until you truly comprehend what you039re doing. 7. Try not to go ballistic when an exchange moves against you This one is huge, in light of the fact that most brokers, particularly fledglings, go nuts or over-respond at the primary indication of an exchange moving against them. This is a great deal to a greater degree an issue in live exchanging than demo exchanging, because of the distinctions in feeling between them, however it is an issue and it should be tended to. An exchange moving against you is NORMAL. I039ve had exchanges move to inside 5 pips of my stop misfortune and go ahead to be HUGE victors after that. In the event that I had gone nuts and finished them off before they hit my stop misfortune, I would have lost cash, as well as I would have lost a great deal of benefit as well. This is the primary motivation behind why you have to give your exchanges a chance to play out and not finish them off early ONLY on the grounds that they039ve moved against you. It039s truly quite straightforward: Set your stop misfortune in a consistentsafe place (more on this later), deal with your position estimate so that your dollar hazard is at a level you039re OK with losing, and LET THE TRADE GO. Don039t small scale deal with your exchanges, simply let the market take every necessary step and you go play a round of golf, go to the exercise center or go to rest then beware of the exchange the following day. Doing nothing with your live exchange is normally the best (and most lucrative) move, which means set and overlook it. 6. Concentrate on the value activity. There was a period once, trust it or not, when individuals exchanged without PCs. Difficult to trust I know, however it039s valid. How would you think they did that It wasn039t with RSI, MACD039s, Stochastics or some computerized exchanging programming clearly it was with PRICE ACTION. They used to peruse the tape at the trades, or they would have the value developments posted up on enormous sheets to peruse and translate. They were translating value changes or value activity. This strategy is the main quotnormalquot exchanging technique and it039s been around since the 1700039s when Japanese rice merchants imagined candle graphs to foresee changes in rice costs. It works, don039t over-muddle it. My interesting interpretation of value activity exchanging has functioned admirably for me and in the event that you take after what I say in my course and utilize extraordinary train and consistent thinking alongside tolerance, it can work for you as well No compelling reason to mess up your outlines and brain with a bundle of chaotic and over-entangled markers or news occasions. I don039t do it and neither should you since it039s an exercise in futility, mental vitality and at last, your cash. 5. Be reasonable Maybe the hardest however most essential thing for another broker to do, is to be practical. I039m sad, yet I need to let you know that you wouldn039t have the capacity to leave your place of employment and go work from a shoreline with a 2,000 exchanging account. In the event that whatever other site or individual is letting you know something like this, you have to RUN from them since they are con artists and do not understand what they039re discussing. Could you make a vessel heap of cash exchanging the business sectors Without a doubt, obviously. Maybe no other calling on the planet has as much upside potential as exchanging. In any case, that comes at a precarious cost it is difficult, in any event not rationally simple. You are going to experience a wide range of mental quottrapsquot and self-attack botches en route on your exchanging venture. Being grounded and practical is the thing that will keep you on the way to exchanging achievement. On the off chance that you begin getting dollar signs in your eyes you039re going to over-influence (hazard excessively) and over exchange your record and lose cash rather than profit. You don039t need that. 4. Try not to exchange a considerable measure. Gradual wins the exchanging race, it039s banality I know, however it039s so valid. Exchanging with high recurrence opens you up to a universe of passionate exchanging botches that will devastate your exchanging account and your self-regard. I039ve composed numerous articles on this subject, and I realize that for a considerable lot of you this will sadly not enlist in your brain until it039s past the point of no return, however you don039t have to exchange a great deal to profit. To comprehend why all the more obviously, look at this article on high recurrence versus low recurrence exchanging. 3. Concentrate on the every day graph You have to figure out how to decipher and exchange the value activity on the day by day graph time period before you do whatever else. I039m not going to get into this too profoundly here, in light of the fact that I have a few different articles on it which you can look at here: The best time periods to exchange Day by day diagram time span the 039Heavenly Grail039 How exchanging day by day diagram will enhance your exchanging comes about 2. Try not to put stop misfortunes excessively close This one is enormous, and it takes most brokers a while and a considerable measure of lost cash to make sense of it you need to put your stop misfortunes at a quotprotectedquot separation far from your entrance cost. On the off chance that you put them excessively close you will get halted out for a misfortune before the market truly had an opportunity to move to support you. At the end of the day, your exchange thought may have been correct, but since you set your stop misfortune excessively close, you got halted out before the move you were reckoning happened. Here are two or three articles to help you with stop misfortune arrangement: Instructions to place stop misfortunes Instructions to utilize the ATR for stop misfortune position 1. Don039t simply bounce in with no training It039s continually astounding to me what number of individuals need to chance their cash in the market without having gotten any preparation or exchanging instruction. At that point later, after they039ve lost a pack of cash, they choose to get some instruction. This is in reverse, it resembles attempting to fly a plane without going to flight school, then you crash the plane and nearly kick the bucket, then after all that you choose to go to flight school numerous dealers do this identical thing with their exchanging accounts, don039t be one of them Spare your cash first to trade training You go to for best forex service in forex signals website 718 Views middot Not for Reproduction Yes. I am a retail trader and I trade for a living. Now it took 10 years to get to that level. I wish I knew what I know that then. What you have to do is find a mentor who trade everyday and learn from them. They will guide you in the right direction and help you avoid the mistakes that most new traders make. Trading is not easy, but it can be simple. That is the reason in my opinion that most people fail. It is simple and most wants to make it complicated. You can learn forex from one of the best day trader that I know. Many retail trader loose money because they complicate things. I did too. There is no holy grail, so forget about that. There are many different strategies and most work 80 of the time however, I failed in the beginning to focus on my trading process. That is the mistake most retail traders make. If you focus on the money from the beginning, you will loose a couple of accounts. On the other hand, if you focus on the trading process, you will eventually start making consistent profit. 415 Views middot View Upvotes middot Not for Reproduction Nick James. Kan skilja mellan handel, investeringar och spel. Njut av dem alla. In fact, most of the retail traders lose money. Forex trading is a marginal trading and this is why it persumes a high degree of risk. Most of the institutions trade without leverage, so there is no margin involved. This leads us to conclusion that if you trade on a leverage 100:1, your risk is 100 times higher than a risk of a bank. Of course, such a risk level corresponds to the reward. To tell you more, there are actually many people making profit on the currency moves. However, what is much more harder is to achieve profits consistently. In 2014 the volatility has been extremely low, this is why it was a great year for traders. 2015 seems to be a bit more volatile, yet there are some money to be made. You can make money with trading forex online, just like with anything else, you need to spend a reasonable amount of time learning, practicing, making mistakes and getting wiser before you can actually start making consistent profits. 1.3k Views middot View Upvotes middot Not for Reproduction May be my reply is not about the discussion. but Haven039t you thought that in case of the starting of the profile and the choice of exchange you have to note to the foundations I mean practicing the competent excellence in performance of selling and buying, as well as the development of trading methods A very skilled person can produce his personal indicators or even trade machines Anyway, all these rests on one important thing that we all, without exception, have to learn: on the trading platform You can learn the reviews or use the most common platforms personally. I would propose to try them absolutely free and test on the site: 239 Views middot Not for Reproduction How do I earn money easily from daily forex trading Is it possible for an amateur forex trader to make sustainable profits trading forex Is it possible to start Forex trading with a total capital of 1K and still make money Do ordinary people make money from forex trading or is it all a scam What percentage of Forex traders make money in the long run What039s the definition of online forex trading Is it possible to make money by doing Forex trading in 2017 Is there a buy-and-hold strategy in forex, or is the only way to make money by trading Can I really make money by trading algorithmically Can you really make 20 to 50 pips per day in forex trading I lose a log of money in Forex trading, there are a lot of black sheep in the industry. Are there some really good professional Forex brokers As an average traderinvestor if I take the opposite trade of my first idea, will I make a killing because 90-95 of traders lose money How FOREX traders worldwide use technical trading system What is the demand that individual retail forex traders can supply online Do online traders make big money Which is the asset class hardest for retail investors to make money Forex, futures, stocks, options, commodities, bonds How do stock traders make money by trading on corporate actionsWhy Most Traders Lose Money and Why the Market Requires It Today, I take a more abstract and deeper look at the issue of 8220why most traders lose money.8221 As you are reading, and as I point out in the article, individuals can escape from herding behavior and create above average (or below average) returns. That said, in order to break from the herd there are a lot of things that must be known about yourself, human tendencies and how these combine to form societal movements (which the stock market reflects). This article will show that what you believe may be your own path may be the exact thing which is keeping you a part of the herd, and thus always entering and exiting the market at the wrong time. It8217s a fairly long article, it may piss some people off, but in long run accepting and learning to deal with the issues which are addressed in this article may help you to move into the small realm of successful traders. Why Most Traders Lose Money and Why the Market Requires It By: Cory Mitchell, CMT Most traders have heard the statistics8230822195 of traders lose money,8221 8220Only 5 of traders can make a living at it,8221 or 8220Only 1 of traders really make money.8221 Whatever the particular number is from recent studies, the fact is, many traders will lose money and it simply cannot be avoided (for some hard numbers, see The Day Trading Success Rate, The Thorough Answer ). All sorts of reasons are given for it, such as money management mishaps, bad timing, bad government policy, poor regulation or a poor strategy. These are all well and good8230and some of those do definitely play a role in individual trading success8230but there is a deeper reason. A deeper reason as to why most traders will lose regardless of what methods they employ. I purport, that even if all traders knew how (keep in mind knowing . and doing are two very different things) to trade successfully based on current conditions, still most traders would lose over the long run. Why Most Traders Lose Money 8211 The Market is Not Independent of Us, It Is Us Why most traders lose money and what traders often fail to realize is that the market is the collective movement of their actions and reactions to their own actions and to other people8217s actions. Sound confusing. Consider this: You tee up a trade, close your eyes and hit 8220enter8221 (open the trade). You have no idea what the market is doing (your eyes are still closed), but you begin to react to your action8211you wonder if you made the right decision, if you should adjust your stop loss or if you should have gotten in earlier or later. That continues to occur after you open your eyes and see how your action (trade) is acting in relation to others people8217s actions and reactions. Even seasoned traders can go through these emotions at times. In other words, the market is a giant feedback loop, showing traders (and anyone who views the market) a thermometer reading of the social mood under which traders, and by extension society, are operating. Most traders seem to think of the market is something that has some external value outside of the price attributed to it by traders. I prefer to think of it as a real-time gauge of a society8217s view of their own productive capacity8230or more simply put8211 social mood . When markets are understood, the idea that everyone can make money is not only inaccurate but impossible and laughable. Everyone making money means there is no market, because who would be taking the other side of the trade In addition, most traders feel they can move with the crowd to make a (paper) profit, and then get out before the crowd, turning that trade into a real profit. In theory this is sound, but remember everyone else is setting out to do the same thing. It is this crowd movement which allows traders to make money at times. Without a large portion of traders coming to the same decision markets simply would not move. It takes conviction by many traders to create a trend, then it takes euphoric acceptance that 8220this is the new norm8221 to end it and 8220bend it. 8221 It then takes mass disillusionment to crash it the other way. Why Most Traders Lose Money 8211 Only Individuals Can Beat the Market, Not the Crowd (and the crowd is the 80-90) Consider for a moment if every trader followed the rule of not risking more than 1 of their account per trade and used similar strategies toted by professionals. Stop loss orders would trigger all over the place and prices would inflate and deflate8230 just as they do now with people adhering to their own (and different types of) strategies In other words, everyone trying to do the same 8220right8221 thing creates the same market movements as everyone doing their own 8220wrong8221 thing. This is why most traders lose money and it is the paradox traders must overcome, for as Master Oogway proclaims in the movie Kung Fu Panda 8220One often meets his destiny on the road he takes to avoid it.8221 Luckily, just as it is almost impossible to convince a bull to be a bear once he or she has taken a position, it would be even more unfathomable to convince each trader to trade a certain way. The point is, it doesn8217t matter how people trade now, or if everyone traded the same8230most would still lose. The attempt of the masses to avoid this (or to created profits) creates the very noose they end up hanging themselves with. Why Most Traders Lose Money 8211 Not Understanding the True Nature of Markets With experience traders can learn to move with the crowd, and also realize the crowd8217s fickle nature (and their own fickle nature as well). Traders may also finally learn that social mood dictates the markets and the news. This is directly opposed to the commonly held view that the news and the market dictate social mood (see: Does News Create Social Mood, Or Does Social Mood Create the News ) Successful traders find something that works and stick to it, not letting others pull them away from their strategy. This is where most traders go wrong and why the crowd loses money. Despite most people8217s best efforts they can8217t pull themselves away from the crowd when it really counts. When all your friends are buying stocks and talking about oil going 200 or 20 (or whatever the number of the day is) and analysts are all over TV saying it is so, it is hard to take a contrarian view. After all, if you make a bet against everyone else and you are wrong, your friends laugh at you because they8217re thinking their paper profits which continue to expand are going to be cashable at the bank soon. You experience regret for missing out on making some money and also may feel some social sheepishness. And heaven forbid you are right and people hate you because you just made money while they lost their shirt. Sound ridiculous Consider the public uproar during the Occupy Wall Street protests, or people feeling great resentment for the hedge funds and traders that made billions by seeing the housing price collapse and taking advantage of it Or the manager who is resented for getting to keep his job while several of his employees are laid off. Winning traders and correct analysts are often 8220crucified8221 during major market turns when the majority lose. (Remember markets are a reflection of society and a leading indicator of the economy, so when stocks are moving down the economy is teetering or already in decline and thus people are already 8220on edge8221 themselves). It is very easy to say 8220I will follow the crowd and then know when to get out.8221 Actually doing it is something entirely different8230which is why crowds move together. This could largely be due to the human tendency to Extrapolate Trends. Trend extrapolation is the tendency to project current conditions into the futures, often assuming all else will remain equal. (see Stock Market is Not Physics Part 1 for more on this). And make no mistake, most hedge fund and mutual funds are no different, most take hits along with retail investors and traders, although usually not to the extreme of the uneducated trader who is more likely to completely wipe out hisher account when things go bad. What is really interesting is that while a hedge fund may make an average of 20year over the last 20 years, the average investor in that fund has a high propensity to make far less than that. Why Because they invest and pull out their funds at the wrong points, just as they do in the market (see brief video at the end of this article). The hedge fund or mutual fund is a (micro) market . where investorstraders can deposit and withdraw based on how they think the fund will do. Side Note . Traders and investors must also be aware of 8220 survivorship bias .8221 We are likely to hear more stories of people making a killing than hearing about people losing everything because the people who lost everything are gone from the public eye and are not talking about it. The few who make money are sure to let everyone know about it and thus create a sort of illusion8211intentionally or unintentionally8211 that anyone can do what they diddo. Also realize, everyone sets out to be an individual and trade their own way, and by doing so most end up being with the crowd that loses money (remember Master Oogway). Why Because each person lets it happen..unwittingly. Their social mood, whether it be optimism, greed, fear, etc is likely being fueled by the same social mood prevalent in society. It is no mistake that individuals begin to like the same sorts of fashions that everyone is wearing. In a quest to change, the majority of society ends up changing together, moving towards similar desires and away from similar dislikes. Therefore, what the market is offering provides the exact thing that will lure the trader into the crowd. For example, someone who has little experience investing in stocks wants to get involved because everyone else in their social circle is, ads are all over tv and even their nightly newscasters are talking a lot more about how the market is so good. In this environment you can be certain there will be lots of 8220helping hands8221 to welcome this investor to the crowd, teach them to be a part of the crowd and initiate them into the world of the blind leading the blind. Why Most Traders Lose Money 8211 Extremes Require Nearly Everyone to Get Onboard While it may be starting to come clear, you may still wonder how it is possible most people lose money and how they seem to join the crowd at exactly the wrong time. When a social mood, such as8230oh, let8217s call it 8220bullishness8221 takes hold of a society or a person, it can be very hard to see the movement for what it is8211something that will pass Everything passes (just like our moods oscillate)8230 just like the craze over tulip bulbs (See: Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay). So people buy and buy and buy, and then other people see this and buy and buy and buy. Then there are the people who hold out, and say 8220No way, I am not doing that again. And anyway, I heard 80 of analysts are already bullish so it can8217t go any higher.8221 But the market keeps ticking higher and so a few of the stragglers join in and buy. Some still hold out and the market keeps ticking higher. Finally, 85 of the population is bullish, and there are still some stragglers8230and the market keeps going up. People are proclaiming their achievements and chanting that boom and bust cycles are a thing of the past. Finally, pretty much every person has become a bull, owning stock, and if they decided not to buy, they have given up (or been told to shut-up) on trying to warn others not to buy8230and market plunges the other way. The chart below shows this in a slightly different way. Since action is more important than talk, when fund managers have almost no cash on hand it means they are 8220all in8221 on the market and that means a reversal is likely to occur soon. The problem is that the market does not generally reverse lower until the fundsinvestors are all in, and it doesn8217t move significantly higher until money has been pulled out of the market and most fundsinvestors are holding lots of cash to reinvest. Source: Robert Prechters April 2010 issue of the Elliott Wave Theorist. The market is unlikely to reverse to any significant degree until almost everyone is on one side. Which means almost everyone who joined that party late is going to lose. A bunch of people may just decide to wait, but so will the market. And if people are divided then the market will move in a ranging fashion. People are the catalyst and without people to create an extreme the market won8217t hit an extreme and reverse8211remember the market does not act on its own, we8230the people8230 are the market. In other words, the boom and bust cycles will not end. We progress and regress and then progress again. Attempting to legislate the boom and bust cycles away is nothing more than political pandering, and is the result of the same mental processes which creates booms and busts in the first place. Again I refer back to Master Oogway8217s comment in Kung Fu Panda 8220One often meets his destiny on the road he takes to avoid it.8221 Political attempts to stop market crashes is nothing more than meeting our destiny on the road to avoid it, another problem is simply created or a bubblecrash occurs somewhere else. Markets are nothing more than the social mood of society8217s participants expressing their view of their own and the collective productive worth. This can be further simplified by saying that my own productivity is largely determined by my overall mood . If I feel hopeless I don8217t work as much or as hard, and I sell stock. If I feel good I work hard, play hard and buy stocks. This applies to almost everyone and while individual experiences vary, on a societal level it plays out in the same way. Until almost everyone (who is watching that time frame, and has the ability and interest to trade it) is in the trend, it won8217t stop. The trend will keep going, enticing more people in, and when it reaches critical mass (which it can8217t do without pretty much everyone on board) a reversal occurs. This change in fortune (for the worse) causes concern and then panic as a full reversal occurs. And as the mood of society continues to grow darker people feel more hopeless and give up fanciful notions of making money with assets and so the assets continue to drop. People then blame and pick fights with others because of their misfortune8230blaming politicians and successful traders who have no more control over the situation than anyone else. This is a result of another human tendency to confuse cause and effect with events that simply happen in conjunction with each other (see the 8216devil gives you a wish8217 example in the Stock Market is Not Physics Part III and also see the 8216Probabilities in Trading8217 example in Probabilities: What are the odds Probabilities in Trading are calculated wrong Part 1 ). It was society8217s own social mood which created the situation, and the social mood of the society which they (we) themselves were a part of, helped create and bought into. The reversal then reaches a bearish extreme where people see no hope, but there are still shares out there and gold to buy and so a few start to buy and the whole process starts again creating waves of smaller and larger degrees across time. Why Most Traders Lose Money 8211 A Simple Numbers Game Financial commentators will make statements such as 8220Most professional money managers can8217t beat the SampP 500 benchmark8230.blah blah blah.8221 True. But it is not the professional money manager showing their ignorance, it is these critics who understand nothing about market movements. Most market movement is created by professional money managers who are managing trillions of dollars in assets, and also by other professionalsbusinesses who need to transact or hedge risks to carry on their business. Therefore, if the market is up 10 in a year, it is because these professional fund managers have on average bought the market up 10. Therefore, it is impossible for most professional money managers to make more than 10 that year, because it would be equivalent to asking someone to beat them self at a game of tennis. Returns will be spread out from negative returns to triple digit returns, but on average they will have made about 10, minus a management fee and expenses which means most fund managers will underperform. If the market is up 10, the average hedge-fund return may be in the ballpark of 8 to 9 after fees, possibly lower. The majority of investors and traders will not beat the benchmark because they themselves create and are a part of that benchmark Does this means the market adheres to the Efficient Market Hypothesis. Not at all. Certain traders do manage to outperform consistently. Also, recall the 8220survivorship bias8221 briefly mentioned earlier Many traders and novice investors come to markets with a handful of bills and then lose it. There is a steady and continual stream of these people. They feed the kitties of those traders that are successful. Also, the very fact that so many people pile into (out of) market tops (bottoms) means there are favorable opportunities for those that can keep an objective eye on the market. Since most traders trade on a shorter time frame than investors, consider this example. On day 1 the market is up 1 and on day 2 is down 1. Most traders will be very near flat and then deduct fees and they are in the hole. Some traders will be up significantly, while others are down significantly. Which traders are profitable and which are losers may change from day to day over the next several months as similar up and down movements occur in the market. Consistent losers will drop off, contributing to the large number of traders who lose money. Traders who are profitable sometimes, but not very often, slowly move toward eventually sliding off the market grid as well. Also consider this. In order for the glory stories to happen..such as traders making a 100. 50082302000 returns (whether in one day, one year or several) how many traders must lose their shirt (or give up profits) for that to happen Lots Look at it a different way. That day trader that made 6,000,000 last year got that money from somewhere. Since small retail traders compose most of the total number of traders (high in number, small in worth compared to professionals) it was likely that 6,000,000 was taken right from those retail traders several thousand dollars at a time. Someone lost money (giving it to this successful trader) or gave up profits (allowing the successful trader to profit). For a day trader to make 6,000,000 in a year, that means about 120 people lost 50,000 each andor gave up 50,000 each in potential profit That of course is not a direct relationship, there is more to it than that . but it does provide a perspective not often considered. In other words, the very thing which lures people in droves to the markets (big returns) ironically means that most of those people will be on the losing end of that exchange. In another ironic twist, when people clamor into the market all at once out of greed and a belief that a new era has begun, they bring about the exact opposite. As Individuals Apart From the Crowd The crowd is not a crowd until most are involved. Crowds can8217t create strong trends until most are involved. A trend won8217t stop until nearly everyone is on board with the crowd. When everyone is on board, it reverses. Since it was likely the 8220big money8221 (that has to trade) that got the trend started and will likely be the first out, this small percentage of traders with the biggest pockets is likely to stay in the winners circle, even if that means making market average returns. The large number of small traders (a very high percentage of all traders) who jump on trends too late (or too early) and then tend to exit too late (or too early) will create the high percentage of traders who lose. Therefore, most traders losing money is inevitable in financial markets. Only the few who understand this concept, who accept that what feels natural and good is likely the wrong choice, may manage to make money at this game. While this article provides a broad context, it applies to the small scale as well. Day traders get caught in the same crowd behavior without knowing it. That stock that won8217t quit, which they watch all day before finally jumping in only to have it move the other way is the same phenomenon on a smaller scale. Buyers and sellers can get exhausted, elated or sedate on any time frame. They experience short andor long bursts of emotion which result in short and long-term actionsreactions, all leading to patterns which are visible on all time frames. There are are also degrees of bullishness and bearishness across time frames, meaning at times the runs and reversals will be aggressive and at other times more sedate depending on how many traders (and the public) are involved. Also consider that if the a benchmark average is somewhere near what professionals are making on average 8211let8217s say 15year8211the average retail trader is attempting to make much more than this, and likely risking too much to do it. For people who want to make a living off trading it is hard to do so off making 15year on a 30,000 trading account. Therefore, retail investors are likely to over-trade and lose most of what they have8211directly contributing to the 15 average return of consistently profitable hedge fund managers. For several hedge fund managers to make 15 on billions of dollars means A LOT of small traders will need to feed that kitty. The only time the majority wins is when there is a shift in overall productive capacity of society, such as the impressive stock rally of the 808217s and 908217s 8211 8211 the latter part of which was more euphoria (bubble). In my opinion, there were some major advances in technology during that time which could potentially do a lot of good, and thus the rise was warranted. Unfortunately, we have mostly squandered that potential good on primarily creating products and services which decrease productivity instead of increased it products which provide us an escape from the real world as opposed to help us harness the real world. These major fundamental shifts do no occur often, which means that in the lulls between most traders and investors will lose money. Why Most Traders Lose Money 8211 Bottom Line The bottom line is that traders must stick to a well-defined plan and trade that plan even when it is uncomfortable (and it often will be). The vast majority of the population, and thus the vast majority of traders, buckle under this uncomfortable pressure8230the same way they reach for the chocolate bar instead of the carrots. Since most of the population is more than happy to join the crowd . by having some discipline combined with a decent strategy it is possible to be one of the few successful traders who actually can leave the crowd before it implodes on itself. I welcome your reasoned comments, rebuttals or questions below, whether agree or disagree. There is some great reading on how our biology seems to be wired for crowd behavior. Robert Prechter has compiled some of it in his book 8220 The Wave Principle of Human Social Behavior and the New Science of Socionomics 8220. As promised, here is that short video on how hedge fund investors usually get in and out at the wrong time, even when the hedge fund is successful. Video: Prechter on Hedge Funds and Herding Watch this surprising description of how hedge fund investors behave: Cory, I stumbled onto this page while looking for a figure as to what percent of the investing population trades Futures, for a book I am writing. No luck finding that number, but I do sometimes like reading articles that people post about making money trading. Usually I find humor in the comments of false prophets suggesting they can show you how to make money. I started reading your article and have to say kudos to you for speaking honestly. Friends ask me regularly how to make money, and I always inform them not even to try. Just invest, watch your tax efficiency, as expenses and gains are one and the same, and over time hope for the best. One thing I do disagree with though is your comment on statistical aberrations. It is incorrect as a function of the time interval you are using being 1 year intervals. An active professional trader can be reviewed each year on performance of 250 intervals, average and standard deviation. When I think of my personal trading performance, that is how I always saw it, what percent of DAYS I traded positively. Over my career that gives me several thousand data points. Two other comments I might make for anyone that still wants to play this game, a game I no longer play myself. Rule 1 8211 (of my 97 rule number 18217s) 8211 A great trader is not someone who sees the future correctly, it is someone who manages their risk correctly. If you are playing a game that is essentially 5050 and you take your profits quickly and let your losses run. You are now creating an unequal distribution of scale between your winners and losers, and you are dead before you start, time will finish you quickly. This takes a serious emotional control, one almost requiring a sociopaths personality. 2- Some people really are just spectacular traders 8211 thinking you can play against these people is the equivalent of me thinking I can line up at Right Offensive Tackle against a 300lb Defensive End. The final outcome is not going to be good. The more sophisticated the product 8211 think options 8211 the worse your disadvantage gets. No one reading this should ever trade options. Once again, Kudos to you for your honesty. It8217s rare. Matt Williamson says: 8220No one reading this should ever trade options8221 Options are both far easier and far more difficult to trade. When structured correctly, a profitable trade can be had while being wrong on direction, timing, and volatility direction, the three main components of option pricing. In short, just because YOU can8217t do it, don8217t cast your blanket of dispersion on everyone. I do it successfully as a retail trader. It can be done. It8217s just damn hard to figure it out. Matt, With all the generosity of my heart, I wish you the best. I didn8217t know I had auto-reply on, so I received your comment today in my e-mail. I will stand by what I said and inform you it is coming from someone who started their career at a boutique derivative firm and went on to hold title as head of trading at three of the largest trading firms in the world. My core competency is non-linear derivatives and synthetic structuring, and I pretty much liked to trade in 1,000 lot clips, but thought nothing of taking down 10 to 50 thousand at a time, and have carried into expiration strike risk of over 200,000 on several occasions, which is rather insane, even by my standards. I was also a member of the NYMEX, COMEX, AMEX, CBOT, CBOE, and CME before I turned 27. I retired by the age of 34 because I burned out completely and just couldn8217t do it anymore. I also never had a losing month in my career as arbitrage removed the variability that I am sure you see attempting to trade options directionally. I do wish you well though. Regards, - wrldtrst Hey again Cory, I just re read this article and it really does ring true with me. I am trying to understand why everyone here in the U. K. is so shocked at Trumps win. Investment analysts across the board are all scratching their heads saying 8216no one saw this coming8217 WTF The excuse is that all the polls and press had it in the can for Hillary. It just reinforces that the markets ARE an extension of people as a mass. This insight may help me to understand how the market is more likely to behave, do you use that model or do you track back from mainstream thinking to market behaviour, which way round do you assess Thanks Cory Mitchell, CMT says: This is tough question, because it changes. Much of the time it is good to follow the herd to a certain extent. I am a trend trader mostly, so when things are going up I am a buyer (only on pullbacks though). But there does come a point when that sentiment becomes too strong. If a trend has been going up and up and up, eventually everyone starts to take it for granted. By that point nearly everyone who wants to buy, has. With no buyers left, the price starts moving down. Or we also see sentiment extremes on the downside. As oil was falling earlier this year and last it was profitable to bet on the decline. But once you start reading the mainstream media talking about the disappearance of oil, and nearly everyone you talk to saying oil is finished, that is typically when I start buying (I also started buying because we were near 2009 lows in oil8230another bad time in history but oil rallied aggressively off those lows). So I look at sentiment a little bit, but typically you can just see it by looking at long-term charts (for investments). You see long-term areas where the price has topped out (sentiment too bullish) or bottomed out (sentiment too bearish). In between I typically don8217t invest8230I just look to buy investments when everyone else hates them8230but that history dictates is a good time to buy. (Sometimes adjustments need to be made for inflation, company growth, etc) Shorter-term trading is really the same thing, but typically that I am not looking or thinking about sentiment at all. I am just trading trends and taking trades based on favorable reward:risk ratios and making assessments of whether the trend is likely to continue or not (based on recent price action8230which gives an idea of whether buyers or sellers are likely to be stronger in over the short-term). So mostly I rely on my charts, but for investment purposes when I start to hear a lot of extremely biased proclamations on the market, I usually start trading in the opposite direction of such claims. Hi Cory, Thank you for such a thoughtful response, it8217s really helpful. Also a great new post today from you, I wish I was already set up for daytrading to take advantage of your insights Eric Martin says: Hi Cory, Nice article. You said, 8220In my opinion, there were some major advances in technology during that time which could potentially do a lot of good, and thus the rise was warranted. Unfortunately, we have mostly squandered that potential good on primarily creating products and services which decrease productivity instead of increased it products which provide us an escape from the real world as opposed to help us harness the real world.8221 I8217m curious what those 8220escape8221 products are I8217m guessing video games8230 not sure. Bora Yagiz says: what a depressing article. just what i needed8230 Cory Mitchell, CMT says: Or liberating. Each person can forge their own path. Just depends on how you look at it. an article telling you have basically ZERO chance of making can NOT be liberating sorry8230 not more than the motto written on the gates of a concentration camp (8220work makes you free8221). unless, of course, you have a different definition for that word. censoring those who disagree, and leaving only positive comments, eh maybe its depressing because the points the article is making about how traders loose to the markets hit sensitive points within you. maybe you just don8217t want to do the work to investigate these points so become a better trader. how do you think it happens. you wake up one morning and you8217re a great trader. Nej. it takes your work. most traders have an idea of wht they think the markets are. they romanticize it so they can be the winner. but reality hits and the market doesn8217t care what a trader thinks. its being the market 100 and if you want to capture profits. get in the flow of the markets. This is such a great article and the comments and your replies are worthy of a post in themselves, perhaps you could elaborate on the theme in your reply to Abhi8217s question, there are some real gems there to be polished The whole article has really got me thinking. I have been seriously following investment blogs and websites for a few years now as I find it an intriguing subject matter which straddles many other subjects including behavioural and group psychology and social anthropology (which was actually my subject at university). There are some incredibly bright and interesting people talking and writing about this field and I love to follow these intelligent guys, I wish I could meet them too and listen I also enjoy podcasts, which I would love to hear, if you have one. But, strangely, I am not actually invested in the market as yet. Ha I may be a late straggler and lose everything I am enjoying the debate and insight and often philosophical humour that prevails in the articles, there is a depth in this field which is difficult to find in political, economic or business blogswriting. I8217m in it for the wisdom, philosophy and humour and the personalities of the people behind the blogs. Having said that, naturally I would consider investing and I have a number of fantasy accounts to play with strategies. I have friends who day trade but I would not previously have considered that as a viable way to earn income. But on reading this article, I am thinking day trading would be a very rapid way to learn the reality of trading and the stock market. I feel bad for commenters Fab and Sarbinson8217s accounts of their losses after decades in the market. Would day trading be a kind of microcosmic method of learning about how markets work and how to best read them and work in them for a profit Cory Mitchell, CMT says: Thanks for the feedback. Yes, day trading is like the microcosm of investing. It will show how prices move. Typically patterns that play when day trading also play out over longer time frames as well. While my investing strategies are different than my day trading method, they are based on similar concepts. If the ultimate goal is to just invest, then learning to day trade8211which takes considerable time and effort8211seems kind of pointless. Better off just to focus on learning how to invest. But if day trading is the goal, then by all means focus on that. Whether day trade, swing trading or investing a person only needs to learn one strategy that works for them in order to make money. All other knowledge is excessive, and not required for making money8230but may be accumulated for the sake of interest, or to sound intelligent in conversation Gud Evng Every One, Mr. Cory Mitchell Sir, it8217s v. insightful amp inspiring article, its cutting the noise and provides smart ideas. Thnx kudos to u, for detailed explanations, its v. rare . My name is Amit, a independent research student and rampd pro from India, Apart from research and work i am having passion in Investment Management, Applied Behavioral Finance amp Analytics, Behavioral Science for Investing. writing, reading, learning new things etc i want to utilize my research:analytical, due diligence, attention for detail skills for doing investment analysis and do research based trading aswell, but after reading ur article now i want to adjust the focus i have 1 question in 2 parts - a) sum people says 8220MIMIC 8216ACTIVIST8217 INVESTOR8217S MOVES8221,what ur take on this idea b) whr to find the (activist8217s) foot prints, in India as well Thank you for your time and consideration. Leadership is not about ur title, its about ur behavior. A Wise Man Cory Mitchell, CMT says: a) MIMIC ACTIVIST INVESTORS MOVES, what ur take on this idea People can do this. But ultimately they still need to follow what the successful trader is doing. This is quite hard. It is no different than just following a winning strategy (following a strategy or a person are the same thing). Most people can8217t do it, and end up deviating. So basically no matter what approach you take to the market, assuming it can theoretically produce profits, the ultimate success of that plan relies on the individual8217s ability to follow the plan. If you follow what a winning trader does, exactly, you should be profitable. Yet few who take this approach are8230see video at end of article. b) I do not know the successful traders in india, nor do I follow much about the Indian stock market, so I can8217t offer any guidance there. Cheers, Cory Great article. Now the even greater irony. Even without reading the comments above I would imagine the overwhelming majority of such commenters will indicate they totally understand what makes a trader successful. Cory8211 Thank you very much for your insightful analysis The more I use behavioral analysis in my investing, the more successful it becomes. 8211Steve RUB1G (RUB1G) says: In the end, it8217s all about identifying the kind of market your trading in and recognizing it when it shifts to a different type of market and being able to change strategies that work given the market you8217re trading in. To get to that point, you have to have inherent, God given traits of perception, patience, intellectual capacity and nerve and years of experience. Most don8217t have the innate ability and those that do, usually lack the staying power. That8217s why there8217s so few who are truly profitable. This is a great article. People are so obsessed with numbers they forget the market is entirely psychological and largely qualitative and it8217s why I find markets fascinating. I realized the keep up with the Jones8217s thing ends in doom every time if you stick on that too long. Sell sell sell buy miners. Hi everyone, I keep studying and learning and trying different strategy but none really seems to work I have done courses read books and still I can t find anything that really give me an hedge, so I start wondering do they really exist a profitable strategy I have done long term trading( holding up to 6 month) for 2 years and did well 30 average return per year, I have been day trading for 1 year I m down 10 Cory Mitchell, CMT says: That is a respectable day trading return in your first year. Many people lose all their capital in the first year of day trading. You are likely doing some things right, it is just a matter of continuing to fine tune your approach. Look through your trades, and spot areas you could improve. For example, is there a way to make your losses slightly smaller Does the price tend to run a bit further after you get out If it does you could seeks to expand your profits slightly. Very minor changes over many trades can take you from being a losing trader to a consistently profitable8230but it takes constant monitoring and adjusting to current market conditions. Your other option is to stick to longer term trading, as that seemed to do well for you thank you, yes many times I get out and price keep going up I went from 70 winner to 70 loser since i m studying technical analyses Cory Mitchell, CMT says: In what way The market operates as a leading indicator for the economy. There are times where there seems to be a disconnect though8230. and we will shall see if it continues to act as a leading indicator in the future as more and more central banks interfere with the market. But markets (more accurately: traders and investors) buysell based on what is expected in the future, which means markets move in anticipation (lead), and then based on the trader8217s conditioningbeliefs they buysell based on what they think will happen next, and so on. Very insightful article. Indeed market is irrational. Oil went up yesterday when it seem that oversupply is still rampant in the market. Lost money by betting against it Cory Mitchell, CMT says: Losing trades happen. That is part of trading. But believing oil will fall because of oversupply on a particular day is not a prudent strategy. Oil has been rising for weeks in spite of oversupply. Successful traders trade off things they have tested and that have proven to reliable over and over again. Also, oversupply was the reason for the decline that took oil below 30 in the first place. That information was already priced in. It8217s old news. Almost everybody was on-board with that idea, and that is why oil fell so much. But as the article states, when everyone is on-board the trend can8217t continue. Oil prices had to go up (in the Canadian Investing Newsletter I have been buying commodity stocks since January). Markets move ahead of the news. They started dropping as oversupply became a potential problem, and then fell heavily when it started getting some publicity. But markets are forward thinking8230so the price rises in anticipation of supply eventually dwindling because some oil companies will go bankrupt and as oil producing countries get squeezed financially there is an increased chance of conflict which would further increase oil prices. The drop was priced in, everyone was onboard, which means there was no one left to keep pushing the price lower8230.so it had to go up. As it pushes up, everyone who sold at the bottom is forced to buy and get out of their losing positions, pushing the price up further. Ultimately though, none of this matters. Study the charts and find patterns that work over and over again. They are there. Then don8217t let the news of the day distract you. Trade the pattern when it occurs, and you will find greater success in the markets. Hi mitchell, I have created a simulation chart based on random numbers, resultant chart look very similar to our real market charts, there will be trends small, major and all kind of, now seeing that trends also form in randomized charts and today most trading happen by algo hft machines, which are not following trends in most cases rather selling buy to capture the spread, so it confuses me whether the trend formation happen due to conviction of many tradors or some other reason behind it. Cory Mitchell, CMT says: Great point and question Abhi. I think your question relates to the fact that something appearing similar is different than cause and effect. Let me explain. If you go into a casino, you can track whether the roulette ball falls on black or red, or if baccarat hands come up player or banker. If you chart this, you will see trending periods, as well as choppy periods. It will look like a stock chart. Yet we know that the results of the ball falling on red or black or the cards dealt in baccarat are random (assuming fair play). So you have a good question8230if the random charts generated above look like stock charts8230are stock charts actually random I say no. What creates the random charts above can8217t be controlled or impacted by the players in the game. Yet with a stock chart, the players do impact what happens on that chart. I can buy and buy and buy, causing an uptrend. But in the casino it doesn8217t matter what I do, the cards are already determined. So while your random charts may look like a stock chart, the cause and effect are different. Stock charts may appear random, but the underlying driver is fear and greed. On a random chart (or in the casino), fear and greed can8217t affect the outcome of the cards or spin. Stock movements are created by thousands or people (or few) buying and selling based on their future expectations, but then reacting as their expectations come to fruition or not. While I have never tried, it, I doubt the strategies I use would work on random data. They work on real markets because there are moments when you know emotion will kick in, and the market (other people) will react in a very specific and predictable way. I do view markets as random much of the time though8230I can8217t make sense of many of the movements. Yet, trading is about finding those specific criteria and moments where the next move becomes quite predictable. You don8217t have that on truly random charts (or games), and therefore, comparing markets to randomness is likely a fruitless endeavor. The real market is about thresholds and conviction (and other people8217s lack of conviction or changing their convictions), and that is often what drives trends. For example, say I decide to start buying a stock. I don8217t even need a reason, I just start buying. Other traders notice this, and also start buying. Anyone who sold to me is now in a state of pain as I continue to push the price up. Eventually they start buying (or covering their short positions) because they fear missing more upside, or their short positions are becoming too costly. As more buyers step I become the seller, unloading my shares on those people. That8217s the power of markets8230one person or a group of people8217s convictions can drive the price (changing other people8217s convictions, and thus creating a somewhat predictable outcome), which then brings more people into the fray. Then, as the conviction changes again, the same thing happens the other way. The chart may look random, but we collectively affect the outcome8230which makes it not random. This is why most people lose. They chase the price, and then person or group that started the whole move unloads their shares on these people. The way to make money is research and practice ways of spotting where emotion will be high, and a thus a predictable outcome is likely to follow. Most people don8217t know that, and so they buy or sell and hope (with little conviction) they are right8230.and those are the exact people who will create the high emotion trades that make successful traders money. Hi Mitchell, thank you so much for the detailed reply, your blog is eye opening, I agree that, chart look same but the causes are different and in trading it is greed and fear, which a trader can know, until the trader knows about it, stock market is similar to random number chart btw we hear all the time that algo trading in majority, how much the greedfear factor play here I deploy some of the high speed order placing mechanism through the robotic softwares that i8217ve developed but i have no idea on exact mechanism that large autohft trading corp use, it is mixture of man and machine btw you can take a look at apps. techfiedstock for random chart, just need to refresh or press redraw, funny that you will sometimes see very clear support and resistence lines. Although chart is based on pseudo random numbers but i think its not going be radically different from true random generators made using hardware. Cory Mitchell, CMT says: Interesting8230those randomly generated charts do look like a real stock chart. But yes, the causes behind them are different. As for mechanical trading, there is technically no greed and fear on the part of the machine, but it is still impacted by greed and fear since other participants in the market are driven by these emotions. Also, even if the market was all mechanical, the bias and strategies of the traders making the robots would create chartsmovements that look like what we have now. The market is still a zero sum game. Regardless of the input (mechanical or man) the end result stays the same8230the best tradersprograms win, and those that don8217t know what they are doing will lose. right, you are always to the point, I am yet to see any profit thru my frequent scalping8230. but i hope things will be different now on. Excellent article Cory Mitchell, thank you for sharing it. It has been really helpful. Took a day off from trading and came across this article. It8217s certainly one of the best articles on trading I have read. The key takeaway (of many) that I got reading this is that the market is a living organism and is a reflection of the 8220mood8221 of the traders in that particular marketinstrument. What I am beginning to understand and dread is that in a market like futuresES for example, even a single contract bought or sold can have a ripple effect on the market. What I have seen trading a simple suppresis strategy recently seems to support this hypothesis. My results in SIM are much better than in real trading. This leads me to believe that perhaps there are algos running that tracks open positions and number of contracts being traded. For example, if I am looking for a reversal after a run up (I identify my areas of interest premarket and use order flow) and short 10 contracts at my resis area, can these 10 contracts in real trading actually affect the movement Are there algos that track that there are now 10 extra (vs SIM) open short positions and continue to push price higher to set off stops Let8217s say it does push price higher to set off stops, and another trader jumps in to short 5 contracts, will that 5 contracts affect price to move higher Machine learning at it8217s finest happening here Cory Mitchell, CMT says: Yes, on small and large scales that happens. Your orders do affect the market, because someone else is on the other side of the transaction and doesn8217t want to lose. Whether it is one person or hundreds, there is a collective action of those on the other side of the trade to do everything they can to make you lose (and others on your side of the trade as well). And you, and other trades on your side of the market, are trying to do the same to the people on the other side8230whether we like to admit it or not. Here8217s some food for though. I used to trade thinly traded stocks. I would watch the level II and see if I could spot bids and offers which looked like short-term traders. I would then take their shares (whether they were bidding or offering) and then continue to push the price offside on them. The goal was to force them out of their position when they bid or offered to get out of their position at a loss, I would exit my trade at a profit. It is a zero sum game, if I made money, the other trader(s) lost. This is a small scale version of every single transaction that occurs in every market every day8230whether a market is liquid or thinly traded this type of action is going on. It is easier to picture though when talking about only a couple traders battling it out in one stock. It8217s not manipulation, it8217s not unfair, it8217s how the market is set up. Now imagine I and the other trader have millionsbillions of dollars to trade with. Other people may see us going at it, buying and selling to each other like crazy trying to force the other guy out at a loss, but it has nothing to do with technical or fundamental analysis. Other traders may join in, not knowing what is going on. Now you have a scenario which reflects every liquid stockmarket. That is why I only trade off the price action. My goal is to join a trade as soon as I see one side taking victory over the other, then the other side is forced out and I can ride that price wave. The premise is the same as what you talk about. Analysis (in day trading) matters but not as much as most people think. It is more about adaptation. I (or others) can push the price for no reason at all except to make you exit and produce a profit for myself. Other traders can do the same to you or me. I now trade liquid instruments because I didn8217t like picking on other individual traders, but trading something liquid isn8217t any different. I am still trying to take positions where I know the other person is likely to lose. Otherwise I lose. That8217s the game. That doesn8217t mean it8217s impossible to make money though. There are still patterns that develop. If someone noticed what I was trying to do in those stocks, they could have smoked me, I did get smoked from time to time. Trading is much more dynamic than most people think..you are up against thinking and learning peoplemachines. They will not politely let you take their money, they will fight back, and try to take yours. Longer-term there are factors which drive large scale social mood changes which affect prices over the long-term. But in day trading it is more like chess match8211you see what your opponents are doing and they see what you are doing, and both of you are trying to do what you can to win and outsmart others. For example, some days there are may be patterns where traders are triggering false breakouts and then taking the price back the other way. Instead of getting angry and calling the market unfair, notice the pattern and adapt to it. ES is probably one of the best markets. I really like it and it is one of the better ones to trade. But make no mistake, the person who fills your order to get into a trade does not want to lose either. It is not cause for dread though. It is an opportunity. When the price action dictates that buyers or sellers are winning the battle, a fairly consistent price action follows because the losers are forced out. That doesn8217t mean you win every trade8230I only win about 60 to 65 of the time, but more often than not if you watch price action you can see the shift of who is winning. Sometimes you will be wrong, and that is fine, but align yourself with the trend and those who are in a stronger position and the odds will favor you. If you find yourself on the losing side more often, look at the charts8230spot the trend and which traders whereare in a stronger position. Consider why you were fooled into picking the wrong direction (or enteringexiting too early or too late), and then adapt. The Trader Mentoring page has some examples of charts with trades from ES: vantagepointtradingtrader-mentoring showing the types of price spots where the odds shift back into the trendingstronger player8217s favor. What if all traders just went long when their trades went against them Just wait it out. Your cash will be useless until that time but at least it won8217t be a loss. And do some traders not use limit stops OK, I8217m not a trader but am trying learn how to manage risk better. Cory Mitchell, CMT says: Lots of traders make 10 or higher each year. But the vast majority don8217t, even if the hedge fund or long-term average gain of stock market is 10. As the video at the end of the article describes, even if a hedge makes 10 a year (or more), most investors within that fund actually lose money, because they deposit money and pull it out at the wrong times. Hi, what if everyone understood that and stopped trading 8211 forever And started being productive instead What if it was against the law to trade accounts below 500 000 Oh, and side notice 8211 the big money goes bust to from time to time, not only retail. And PS. the answer to these questions is probably a world war or spoliation, plunders like in the old days. There must be the transference of capital goods from small to big, weak to strong 8211 no matter what 8211 so pay your dues and thank almighty you don8217t have to kill to eat. I must add something I noticed recently. Brokers have been putting out comparisons for how profitable their traders are. Like discussed here: forexmagnatesexclusive-q2-2013-us-forex-profitability-report-35-of-retail-clients-gain Beware such numbers, as they don8217t tell the whole story. In a given quarter about 35 of traders may make money, but 65 are losing. Span that out over several quarters and the statistic indicates that many of the profitable traders will gravitate to the negative sphere. Yet it may not show up in the quarterly stat which will usually stay around 3565. Unless it is the same 35 staying profitable, the statistic is useless. To stay in that 35 you need to be consistently profitable, but this stat doesn8217t address that. The 35 that are profitable could be different every quarter and in the quarters they aren8217t profitable they are part of the losing group. We also need to consider survivorship bias. The stats considers trader accounts that are active during the quarter. If you completely draw down your trading account this quarter you are counted in the losing 65. But since you will be inactive next quarter (no money and no trading) you aren8217t counted as a loser again. But this tidbit throws a wrench the idea that 35 of the traders are profitable. Because it doesn8217t count all the guys who went broke in previous quarters. The stat that needs to be divulged is this: Of all the accounts opened since the brokerage began, how many are showing a profit today (or a profit when the account when the account was closed) You ask that, and I am sure you will get a much much smaller of profitable traders. A vast majority of the accounts opened will be inactive due to depleted funds. Here is an example to make this clear. While I was a trader on a trading floor we had about 30 full-time traders. In a given month at least 25 were profitable (but they were all profitable overall, otherwise they wouldn8217t have a job). A high percentage of winners. But what the stat doesn8217t tell you is how many traders tried to make it onto the floor and failed. Over the course of 6 years we probably had about 10 guys a month come in for training and attempted to make money. That is about 720 potential traders. They all failed eventually or a few became part of the 30 full-timers and other formerly profitable traders fell out. So instead of 25 out of 30 being profitable (this is the type of stat the brokers are divulging, which is bullshit), we need to count the guys who blew up. The real stat is that 25-30 out of 750 were profitable, or about 4. If anyone has a historical brokerage account stat like that I would love to see it8230especially if it proves me wrong. helen senior says: FYI trading is not a zero sum game. Most traders are under this massive delusion. Market makers have an obligation to provide liquidity. The odds are extremely high that your broker is providing the opposite side for your trades. When you lose, that money becomes their profit, plus the commissions. So with their variable spreads and your stop losses, their software aims to take as much money out of your account as possible. Once they8217ve made their quota, the traders who are lucky enough not to have gotten stopped out might make a profit although this is nothing compared to what the brokers will have made in the process. Why don8217t you ask your broker who their liquidity provider is and how their variable spreads are calculated. If you8217re with a market maker or dealing desk broker, chances are you8217ve got no chance of making consistent profits. Your success or more likely, failure as a trader has much more to do with this than any strategy you implement or psychology you adopt. I don8217t think this is the case helen because if you open different charts from different brokers the price movements are the same, to say a brokers softwares is hunting stop losses would mean prices with that broker are not consistent with market prices with other brokers, but that is not the case, i once thought my broker hunts my stop losses but i when i opened different charts the price movements were all synchronised. The point that trading is most definitely not a zero sum game is correct. It is a negative sum game. The buyer and seller bring X dollars to the table but some of that gets raked off due to commissions and spreads and other ancillary costs (data feed, subscriptions, etc). A zero sum game would be a game of poker at your friend8217s house. In 1990 I went through membership class with 19 other people. After six weeks, I was the only person still standing. The 95 rule seems to hold. I would say that of every 100 people that lasted maybe 3-4 were truly standout, raking in the money, hand over fist, traders. Now if you go to a top Ivy school 8211 or equivalent 8211 and get on a top trading desk at a top investment bank, your odds invert and you probably have a 95 chance of success. Success being seven to eight figures a year. So if you want to be a successful trader start thinking about it when you are about 10 years old. Leave a Reply Cancel reply